Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would occur under level production, and aftertax costs would decline by $53,900, but inventory would increase by $490,000. Wisconsin Snowmobile would have to finance the extra inventory at a cost of 12.0 percent.

a-1. Determine the extra cost or savings of switching over to level production.

a-2. Should the company go ahead and switch to level production?

b. How low would interest rates need to fall before level production would be feasible? (Input your answer as a percent rounded to the nearest whole number.)